To say that I jumped into self publishing without knowing anything about business is undercutting it a little bit.
Read: a lot.
Words like quarterly taxes and sales tax and revenue and Quickbooks were SO not important. Writing was important. Making money was important so I could publish more books, but not because I needed to make a profit.
Paying Yourself a Profit
Pulling a profit? That would come later. When I had more books and was selling more copies per month. The most important thing for my business was creating more books for more people to buy, right? Ebooks. Paperbacks. Audiobooks. #allthethings ALL my money that I pulled in from Antebellum Publishing went back into Antebellum Publishing. Wasn’t that how entrepreneurship worked?
Until when? Husband would ask, and I would just wave it off. Until I’m making more money. I can’t afford to take a profit right now.
Does any of this sound familiar to you?
Husband switched from active duty Army to the National Guard so he could get his Master’s degree, which left me sitting in the chair of provide as much money as you can to feed our child and pay our electricity bill. Which is awesome, because if anything, I luuuuhv the presshah!
In regards to my finances, I couldn’t put a finger on what was wrong, but I could tell something wasn’t right. How could I be making money, but not have any in my account? My Quickbooks screens were depressing: from April 2016—April 2017 I had made a profit of $10. (I had pulled in over $20,000, but somehow spent all of it again.)
I looked at those numbers and thought, WOT. Where has it gone?
I was basically Titanic heading right for that iceberg and I didn’t even SEE the iceberg. My business coach Natalie Eckdahl with the Biz Chix referred Mike Michalowicz’s book Profit First to one of her clients during an on-air coaching call, and I immediately checked it out. (When Natalie speaks, I listen.) Before I’d even bought the book, I emailed Mike about it.
The book arrived, and everything changed.
Money Management In a Nutshell
Profit First is a system to organize your finances. That’s pretty much it. Mike breaks your business (as an entrepreneur) into five accounts and walks you through the process of slowly cutting expenses while paying yourself money. It sounds complicated but it’s really not as bad as you think. I’m the least detail-oriented human in the world. If I can pull this off, you can.
This is the basic breakdown. You’ll create five checking accounts. (Yep. Five.)
- Owners Compensation
- Operating Expenses
Twice a month, you’ll divvy out your funds based on certain percentages that you slowly tweak from quarter to quarter. (You won’t go from all-in to only having 25% of your income go to operating expense, for example. He eases you into it.)
These days, I may a biweekly salary and a quarterly profit.
My Experience Implementing Profit First
Here’s a little advice in putting Profit First into motion.
- Read it first. All the way through.
- Don’t psych yourself out when he starts explaining percentages. It’s not that bad. I promise. He basically holds your hand with witty vernacular.
- Find a bank that doesn’t charge monthly costs for having 5 checking accounts and 2 savings accounts. They’re out there. Trust me. It’s so worth it. And work with them however you have to. It took me about two weeks to really get things set up and in motion. I called the bank at least six times to arrange things to my liking. Right now, I have 5 checking accounts and 3 savings accounts without monthly fees that I can transfer through as needed. It’s WORTH THE TIME.
- If you aren’t already using Quickbooks Self Employed or some other means to stay organized, start right now.
- It’s really tough to face this music. I had a hard time swallowing the fact that I’d been breezing through thousands of dollars in expenses that may have not helped me, or have been unneeded charges.
- Buy yourself a brownie when you’re done. That is a lot of work that’s literally going to change your life.
Why You Should Buy It Right Now
For me, Profit First has been more of a mental revolution than anything. It’s changed my focus. Thanks to Profit First, when I work now, I know I’m going to get paid, and that makes me work a lot harder.
Instead of all my funds going into one giant plate, I have lots of little plates. I can look at one aspect of my business and know exactly what’s going on. This pulls the entrepreneur that loves a challenge out of me. If I don’t have the money to throw at something, I’ll just find another way to make it happen. Because that’s what we do.
We make magic happen.
Are you thinking about self publishing but don’t know where to start? Or are you a self publisher that just needs to sit someone down and get help? The great news is that coaching calls have arrived! I’ve absolutely loved helping all of you out via email, but the problem is I can’t do much that way. (read: toddler. dogs. husband. dinner. life.) In order to serve you guys best, I’m offering 60 minute sessions dedicated totally to you and your self publishing questions. We can dive in and get dirty.
Right now? They’re only $99. Join my KCW email list and get a 10% discount (not to mention other great discounts off indie publishing services too!)
Click right here if you’re interested.
I can’t wait to chat with you!